Franchising Update: Franchising reforms in force 1 July 2010: Franchisors face increased disclosure obligations – June 2010

As for shadowed in our March 2010 Newsletter, franchisors will face disclosure requirements under reforms to the Franchising Code of Conduct as announced by Small Business Minister Dr Craig Emerson. In addition to the amendments to the Franchising Code of Conduct, the ACCC has been given new powers to conduct random audits of franchisors. These audits will focus on ensuring franchisors comply with the law. The ACCC will have the power to name franchisors that do not comply. This is likely to have a significant impact on a franchisor’s ability to recruit new franchisees and reduce the value of existing franchises when franchisees seek to sell [read more].